Samsung to Pursue Major Deals Amid Growth Struggles
Deal News | Mar 19, 2025 | EIN
Samsung Electronics, South Korea's most valuable company, is considering major mergers and acquisitions (M&A) deals to drive growth, as it contends with weak earnings, sagging share prices, and loss of market position in advanced memory chips and contract chip manufacturing amidst the AI boom. At a recent shareholder meeting, co-CEO Han Jong-hee apologized for the company's underwhelming stock performance, admitting that Samsung failed to capitalize on the opportunities presented by the rapidly evolving AI semiconductor market. With Chairman Jay Y. Lee acknowledging that the company's technological edge has diminished, Samsung plans to pursue significant innovation and address challenges head-on. In a bid to stabilize its stocks, Samsung has already launched a 10 trillion won ($7.2 billion) share buyback plan. Throughout 2024, Samsung expects volatile conditions due to economic uncertainties, particularly around U.S. tariffs, and plans to make strategic investments in the U.S. market. The company also contemplates expanding a stock-based performance system to retain talent. Samsung shares rose modestly amidst broader pressure from shareholders demanding significant action to revive the company's value.
Sectors
- Semiconductors
- Consumer Electronics
- Corporate Finance
- Telecommunications Equipment
Geography
- South Korea – Samsung Electronics is a South Korean company and is the largest market entity there, with significant national economic and stock market implications.
- United States – Samsung's strategy involves responding to U.S. tariffs and considering investments in this significant market.
Industry
- Semiconductors – The article focuses on Samsung's challenges and strategies in the semiconductor market, particularly regarding AI semiconductor development.
- Consumer Electronics – Samsung's operations in the consumer electronics sector are integral to its overall business challenges and strategic pivot, involving smartphones and other consumer products.
- Corporate Finance – The discussion of M&A deals, share buybacks, and investment strategies highlights corporate finance activities within Samsung.
- Telecommunications Equipment – Samsung's involvement in telecommunications equipment is integral to understanding its challenges with manufacturing and market share.
Financials
- 10 trillion won ($7.2 billion) – The amount allocated by Samsung for a share buyback plan to bolster its stock price.
- $235 billion – Samsung's market capitalization, making it South Korea's most valuable company.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Samsung Electronics | Target Company | Company | Samsung Electronics is a leading global technology company, involved in consumer electronics and semiconductor manufacturing. |
| Han Jong-hee | Co-CEO | Person | Co-CEO of Samsung Electronics, he addressed the shareholders on the company’s strategies moving forward. |
| Jay Y. Lee | Chairman | Person | Chairman of Samsung Electronics, his message on the technological direction of the company highlighted strategic insights. |
| SK Hynix | Competitor | Company | A rival in the semiconductor industry, particularly noted for competition in high bandwidth memory chips. |
| TSMC | Competitor | Company | Dominant in the contract chip manufacturing sector, posing significant competition to Samsung. |
| Apple | Competitor | Company | A competitor in the smartphone market, contributing to Samsung’s market share challenges. |